As sports betting has become increasingly popular, it's important to understand what you’re betting on, who to bet with but also what do betting odds mean and how they can differ.
Understanding how betting odds work can be the deciding factor in winning and losing your bets. Figuring out how to read odds is crucial for those who want to actively engage in online sports betting, as they determine probabilities of wins and overall potential payouts.
Here at The Sporting News, we give you the lowdown and help to explain the burning question — exactly how do betting odds work?
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How to read sports betting odds
Are you looking for sports betting odds to wager on? Understanding how to read sports betting odds is vital to making the best value plays, but unlike in past generations, online sportsbook often do the hard yards for you.
You can add a selection to your betslip and input your chosen stake and it will automatically calculate the potential returns based on the odds. This could be for a single wager, an accumulator or a bet builder, for example.
Knowing how to read odds can allow you to extract the most value and best returns from the bookmaker — including when to cash-out, or maybe even when to avoid staking if there’s too much movement in the market.
There’s three main ways odds will be presented, and whilst fractional odds are most common in the U.K., it’s key to understand how they all work and interchange, as some popular betting apps and sites, including betting exchanges, will use different ways to present their odds depending on their customer base.
MORE: Read our expert guide to betting on football
How to read fractional odds
Fractional odds are most commonly used in the U.K. and they’re expressed as a ratio, such as 5/1 (pronounced five to one).
Breaking it down, that means for every £1 you bet, you can win £5 in profit. In this instance, a £10 winning bet on a 5/1 play means you would receive £60, with £10 of that being your original stake.
How to read decimal odds
Decimal odds betting is also used in the U.K., including with betting exchanges such as Matchbook and the Betfair Exchange — but it's also in Europe too. Decimal odds represent the total payout of your bet, rather than just the pure profit.
That means odds of 3.5 mean that for every £1 you bet, total return would be £3.50, including your initial stake. A £10 bet at 3.5 decimal odds would return a total of £35.
How to read American odds
Finally there are American odds, otherwise known as moneyline odds. This is most widely used in the USA, representing either a positive or negative number.
The betting favourite comes with a minus symbol (-), the higher the absolute value of the number, the bettor the chance the traders give for that team or individual to win. For example, a -200 favourite has been calculated to have a better chance to win that a -120 favourite.
Underdog betting comes with a plus symbol (+). The higher the number, the larger the underdog is. For instance a +200 underdog has a better chance of winning than a +500 outsider.
A -135 favourite means you must wager a £135 to win £100 from the bookmaker. A +350 outsider means by placing a £100 bet you could win £350, £100 of that being your original stake.
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What is the house edge and the vigorish?
What is the 'house edge', we hear you say? House edge is an expression — but also a mathematical sum — that sportsbooks and casinos have in each game, or each market hold over the bettor to ensure, no matter the short-term payouts, that they always 'win' in the long-run.
Understanding the significance of the house edge will help you place your bets wisely, as it can differ for each bet you make. The larger the house edge, the more likely the sportsbook is to win over a long period of time.
What is the difference between house edge and RTP?
It can be easy for bettors to mistake house edge for the term "Return to Player" (RTP), but they are actually opposite concepts. Here's how to tell the difference:
- House Edge: The percentage of each bet that the sportsbook keeps to itself.
- RTP: The percentage of the total wagers that are returned to players as winnings over time.
For example, if a game has a house edge of 5%, the RTP would be 95%. Although the house edge ultimately works in favour of the casinos or sportsbooks, RTP works in favour of the players. The two are inversely related, meaning that as one increases the other consequently decreases.
How about the vigorish? The vig or vigorish has only really entered the U.K. parlance in recent years, coming over from the USA as they try to work out the ‘vig’ on their parlays, or accumulators to us U.K. bettors.
It’s essentially the cut or amount the sports betting sites charge for taking a bet, often known as the 'juice' in slang terms.
An online bookmaker only takes the vig if you lose the wager.
How to calculate the payout of a bet
There are many betting odds calculators online to convert your decimal odds to fractional or moneyline odds to make it clearer and concise. Paddy Power are among the major firms who also offer a free odds calculator online.
The various different types of odds are simply different ways of presenting probabilities. Commonly used by the bookmakers, one form can be converted into another with relative ease to help understand your sports betting odds.
Once the implied probability for a specific outcome is known — often presented as a percentage — then bettors can make their own decision on whether or not to make the wager in their chosen odds format.